One of the challenges EOR companies encounter stems from the volatility of the South African Rand, which directly impacts their South African employees. Image: Supplied.
It’s estimated that by 2025, 70% of the workforce will be working remotely for at least 5 days a month, with the trend of flexibility and adaptability here to stay.
This shift towards fully remote or hybrid working models has seen a rise in Employer of Record (EOR) services as international companies look to expand globally, and need help with navigating the complexities of local labour laws, mitigating risks, and maintaining operational flexibility.
Driven by the need for compliance, cost-efficiency, and flexibility, EOR services have become essential for companies looking to expand their operations across borders without the burden of establishing a legal entity.
This trend, where the EOR service provider employs the individual in South Africa directly and then assigns the person’s services to the foreign company for a fee, is a natural outcome of the increase in remote working arrangements globally.
South Africa has witnessed a notable surge in the Employer of Record (EOR) sector, reflecting a dynamic landscape of evolving workforce dynamics and regulatory frameworks.
This rapid expansion signifies a fundamental shift in how businesses engage with talent management, embracing outsourced solutions that provide scalability, efficiency, and peace of mind in an ever-evolving employment landscape.
One of the challenges EOR companies encounter stems from the volatility of the South African Rand, which directly impacts their South African employees.
This fluctuation results in unpredictable monthly income for employees, presenting obstacles in personal financial planning and budgeting.
Seeking advice from financial experts or consultants specialising in FX risk management can provide valuable insights and guidance in developing appropriate strategies for EOR companies to address these challenges.
This is where Kuda Foreign Exchange’s services have become a game changer for their EOR clients.
Over the past two years, Kuda FX, a registered foreign exchange intermediary, has strategically expanded its service offerings to EOR companies, like HireJustNow, which fixes their employee salaries for up to 12 months in advance at a constant rate.
By prioritising the financial security of employees, HireJustNow can foster a work environment conducive to productivity, innovation, and long-term success.
“Kuda FX offers our clients access to a wide range of financial instruments and hedging strategies, empowering them to effectively manage currency risk and capitalise on market opportunities. Through a combination of market expertise, technological infrastructure, and personalised service, Kuda FX offers tailored solutions that address clients' specific needs,” Stian van Zyl, Forex Risk Manager at Kuda FX said.
“By serving as a trusted partner and advisor, we enable clients to navigate the complexities of international business with confidence and efficiency, ultimately contributing to their success in the global marketplace,” van Zyl added.
Kuda FX implements hedging strategies such as forward contracts, options, or futures to eliminate the impact of currency fluctuations. This involves locking in exchange rates for future transactions to reduce uncertainty.
With more companies willing to employ remote teams, EOR platforms like HireJustNow facilitate this transition by providing comprehensive HR services, onboarding, and compliance support.
“75% of our employees reside in the Western Cape, with 50% of all employees on our platform residing in Cape Town, which correlates with the trend of Cape Town becoming a digital hub or preferred destination for remote workers,“ Rayno Blomerus, HireJustNow’s Head of Operations said.
BUSINESS REPORT